Nobody likes to be called a tart, but in recent years the phrase has come to mean something very different in the financial community. The proliferation of comparison websites is in part to blame for this, but so too is the sheer range of balance transfer options there are out there from credit card companies like MBNA.
So what is a ‘rate tart’ and is it such a bad thing? Does it pay to be loyal to one provider and stick with one type of account or should you always be on the lookout for a better deal? Well, that can really depend on where your finances are and exactly what it is you’re trying to achieve. Here is a look at three types of borrower and whether this type of practice can help them.
Borrowers looking to reduce their monthly outgoings
This tends to be prime tart territory and quite rightly so. Keeping abreast of the best APRs and taking advantage of zero per cent balance transfer periods can really make a difference in the long run. The thing to do is take a close look at your credit card statements from previous months and, looking at the APR, see if another provider (or even the same one) has a better card for you. One thing to be cautious of though, is the other charges that may apply – as these could potentially outweigh any savings you may make if you switch.
People looking to improve their credit rating
One concern many people have about switching credit cards every six months or so is the effect it will have on their credit rating. The number of credit searches that are made against you shouldn’t make too much of a difference as they are deleted after 12 months, but if you are late with payments because of changeovers this will obviously hurt your rating. Also, if you have too many cards at once, it can be easy to let your borrowing get out of control and this can be bad news. The reality is, if your goal is better credit you just need to keep things simple, don’t spend too much and always pay on time.
Those consolidating their existing debts from other cards
Once you’ve managed to get all of your existing credit card debts and store card balances in one place, there really is no reason why you should be tied to that one card. If your balance transfer period has come to an end, for example, it may be time to look elsewhere, but again you’ll need to weigh up the charges and ask yourself if it’s worth the hassle. Of course, when you apply for a credit card, providers will do everything to make it as quick and easy as possible – but this just makes it even more essential that you do your homework in advance.
Rate tarting – or ‘stoozing’ as it is often called – is something many people swear by, just make sure it is the right thing for you before you go ahead and start making applications.